03/2019: The Unfinished Business of Redoing PREPA – Above all, it needs to figure out how it can operate in PR´s future

The privatization of the PR Electricity Power Authority (PREPA) has become a rallying cry for many over the last few years. With it, a consensus has slowly emerged that the company’s shortfalls can only be addressed by the private sector and this will generate much-needed liquidity for the Commonwealth. A closer look, however, reveals that the situation is more complex than meets the eye. Chief amongst the unresolved challenges are PREPA’s future operating model and the lack of an optimization process to determine the company’s investment priorities. Whether we like it not, PR’s systemic risks will remain elevated for some time, most of which will be impossible to mitigate. In consequence, PREPA will have to adapt constantly to changing conditions on the ground, making the need for operational flexibility and the ability to quickly change priorities all the more pressing. Final success—or failure—will largely depend on this and not simply on a change of ownership.